Fab.com Underscores A Shift From Search To Discovery

While much ado has been made over F-Commerce or e-commerce enabled via Facebook, the reality is that Facebook is indeed driving commerce, but not in the linear fashion that has been predicted by many (including myself).

So while Facebook users are not clicking through to shop directly from brand pages, they are using Facebook as a tool to discover new products. Take Fab.com. Originally founded in April ’10 by CEO Jason Goldberg (a serial entrepreneur who worked for Bill Clinton in a previous life) and co-founder Bradford Shellhammer as a gay social networking site, the site pivoted a year later into a curated catalogue of unique design products sold at deep discounts of 50-70%.

Within six months the website had 1.5 million members and $200,000 in daily sales on average. So what you ask? Consider that it took The Gilt Group and One King’s Lane a full year to acquire 1 million members.

The site has added 450,000 users in January ’12 alone and is expected to do $100 million in sales this year.

The management team also raised $40 million in Series B funding led by Andreessen Horowitz. Roughly half of these members came through from social sharing on Facebook and other social networks.

Unique Visitors on Fab.com since December ’10

These numbers are borne out by a quick analysis of the website. While the site saw a steady rise in visitors all year, it has exhibited classic hockey stick growth since October ’11 – about the same time it raised a massive round of investment. Much of this is fuelled by college-educated women 25-34 years old with more disposable income than the average American.

Users click through to Fab.com from these sites

I believe its important to dissect the mechanics of Fab.com’s success as it underscores a broad transition in the web from search to discovery, a shift retailers should probably pay attention to. Consumers don’t just want to be fed information brands feel is relevant to them, they want to actively engage in content discovery. Fab’s focus on products with a unique design is uniquely suited to this transition. Much of this design aesthetic reflects the tastes of co-founder Bradford Shellhammer, as exhibited in his NYC apartment. CEO Goldberg maintains that the decision to source content on the website is fuelled mostly by the team’s taste in design (i.e. content curation), rather than early sales indicators – much as an editor would back in the day when there was still a division between church and state in publishing. This focus on delivering visually appealing, high quality content while giving visitors the freedom to browse, also explains the site’s broad appeal to social audiences. This is helped along by deep social integration across the entire site. At last week’s Business Insider Summit, CEO Jason Goldberg talked about how Facebook, Pinterest and Twitter are among the top referrers to Fab.com. This is traffic gold for an online retailer as it ensures a broad reach without accompanying advertising costs.

Given the visual design, it comes as no surprise that people purchase four times as often when they are looking at Fab on a tablet than the web. Add to that a non-invasive browsing experience (users can choose to share their activity anonymously to under their name), and the founders have a winner on their hands. The moral of the story for other retailers would appear to be:

Website visitors need a certain degree of serendipity in their online browsing and shopping experience. Give it to them.

Content curation should factor in not just volume but quality – one will follow the other.

A visually appealing website is more conducive to social sharing, appealing images have become front and centre in today’s online experience. It also makes for a better experience for mobile and tablet users – typically a more affluent demographic. Invest in an in-house photo studio if resources allow.

Design deep social integration throughout your site. Let visitors indicate how much they like the content via love/like buttons and comments and this will spur website engagement.

Stay non-invasive. Put the user in the driver’s seat in terms of what and how much they’d like to share with others.

That said, it is still early days for Fab. With hockey stick growth come challenges related to customer service and timely delivery; Zappos and Amazon have forever changed customers’ expectations as they relate to point of sale and post-sale experience. As the site scales up from selling 3,500 products at a time to selling tens of thousands, the true test will be how the management team is able to meet these expectations. Early feedback from Fab customers seems to indicate that this is one nut Fab management has yet to crack. Given Goldberg’s prior experience and his early attention to data, there is no reason to think the team won’t rise to the occasion.

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